Maha police to take a relook at circular on complaints against builders

The powerful builders' lobby, fearing the circular would open floodgates of police complaints against them by aggrieved flat buyers, wants the government to cancel it.Nauzer Bharucha | TNN | July 22, 2016, 08:08 IST

Mumbai: The state police has not withdrawn its circular directing senior cops to register cases against builders who cheat buyers, special inspector general of police Prabhat Kumar told TOI on Thursday.

It will, however, legally examine it further for any loopholes following a letter from the state home department to the director general of police on Wednesday stating that the circular is "inconsistent with provisions of the Act".

The powerful builders' lobby, fearing the circular would open floodgates of police complaints against them by aggrieved flat buyers, wants the government to cancel it.

Those opposing the circular are bodies such as the Marathi Builders Association, Pune, Maharashtra Chambers of Housing Industry-CREDAI and National Real Estate Development Council. Developers complained that holding builder solely responsible is a dangerous sign for business, especially when there are frequent changes in building rules and regulations. Construction industry sources said the general belief is that the circular has been scrapped following the home department's letter. In fact, sources said there is pressure on the BJP-led government to cancel it.

Kumar, who issued the circular, said the police will continue to take action against errant builders under the provisions of law. "The home department has not directed us to withdraw the circular. It has only pointed out some lacunae. We will legally examine it again following the home department's observation," he said.

Kumar has sought action against builders under the Maharashtra Ownership Flat Act (MOFA)-1963. However, the state housing department said the police cannot use MOFA because this Act has now been scrapped and replaced by the Real Estate (Regulation & Development) Act. 2016. The state law and judiciary department, however, opined that certain sections of MOFA are still in force. After looking at both opinions the home department cautioned that the DG's circular seeking action under MOFA may be contrary to these opinion.

Sudip Mullick, a partner with the construction practice of law firm Khaitan & Co, had earlier told TOI that the old law, MOFA, is still in force in the state. "The government has only notified certain sections of RERA. The relevant sections of the new Act (like provisions of action to be taken against builders for delay, etc) have still not been notified by the state. MOFA has not been repealed," he said.

Early this month, the state police directed police stations across Maharashtra to register complaints against builders who cheat flat buyers and violate building norms. The circular said complaints include builders failing to hand over possession on time to buyers or developers who deliver apartments without procuring the mandatory building occupation certificate.